TLDR
- PM stock trades at $166.96, up 76% over the past year, with Q1 2025 revenue of $9.3B and EPS of $1.72.
- Smoke-free business surged 20% organically; IQOS and ZYN shipments grew 9.4% and 53%, respectively.
- Profit margin expanded to 29%; adjusted EPS rose 12.7% in dollars and 17.3% in constant currency.
- Gross margin grew 340 basis points, while SG&A savings topped $180 million.
- Currency headwinds and IQOS flavor ban in Europe are near-term risks.
Philip Morris International Inc. (NYSE:PM) continues to outperform expectations in 2025. The stock is currently priced at $166.96 as of April 24, up nearly 40% year to date and 76.18% over the past 12 months. The company released its first-quarter results on April 23, beating analyst estimates across key metrics.
Philip Morris International Inc. (NYSE:PM)
Robust Revenue and Profit Growth
PM reported Q1 2025 revenue of $9.3 billion, up 5.8% year-over-year. Net income surged to $2.68 billion, a 25% increase, while EPS rose from $1.38 to $1.72. Profit margin improved to 29%, up from 24% in Q1 2024.
Adjusted diluted EPS climbed 17.3% in constant currency and 12.7% in dollar terms to $1.69, beating analyst expectations by 9.1%.
The company forecasts adjusted EPS between $7.36 and $7.49 for full-year 2025, reflecting 12% to 14% annual growth in dollar terms.
Smoke-Free Category Fuels Growth
Philip Morris’s transformation toward reduced-risk products paid off again in Q1. Smoke-free revenues jumped 20% organically, and gross profit from this segment increased 33%.
ZYN shipments reached 202 million cans, growing 53% year-over-year, while IQOS heated tobacco units (HTUs) saw 9.4% IMS-adjusted growth. VEEV shipments more than doubled, signaling strong demand in alternative nicotine formats.
The company also achieved a 16% increase in organic operating income, and margins expanded by 250 basis points to 40.7%. Overall gross margin climbed 340 basis points, driven by mix and operational improvements.
Operational Efficiencies and Challenges
PM achieved over $180 million in SG&A cost savings during the quarter, contributing to strong margin performance.
However, some near-term headwinds remain. Currency fluctuations reduced EPS by $0.07, and IQOS growth was partially hit by the EU’s characterizing flavor ban. ZYN shipments faced out-of-stock issues in the U.S., affecting retailer inventories.
The company also noted a negative geographic mix in combustibles, with stronger sales in lower-margin markets such as Turkey and Egypt.
Market-Beating Returns and Outlook
Philip Morris continues to outperform the broader market. Its YTD return stands at 39.95%, while the S&P 500 is down 8.57% over the same period.
Over five years, PM stock has delivered a 194.47% return—more than double the S&P 500’s 89.57%. Analysts project an average annual revenue growth of 6.7% over the next three years, well ahead of the tobacco industry average of 2.2%.
With a forward dividend yield of 3.21% and strong growth across smoke-free categories, Philip Morris is successfully executing its transformation strategy. However, supply constraints and regulatory risks remain on the radar for the coming quarters.
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